India asks Xiaomi to pay nearly US$88 million in import taxes

On Tuesday, September 5, 2017, when the smartphone was launched in New Delhi, India, a participant held a Mi A1 dual camera device from Xiaomi.

Anindito Mukherjee | Bloomberg | Getty Images

India requires local branches of Chinese smartphone manufacturers Millet After the investigation, an import tax of 653 million rupees ($87.8 million) was paid.

The Tax Intelligence Agency conducted an investigation which resulted in the recovery of documents during a search of Xiaomi’s premises in India. Ministry of Finance Statement Said Wednesday.

“During the investigation, it was further discovered that Xiaomi India paid Qualcomm For Beijing Xiaomi Mobile Software Co., Ltd., China (an affiliate of Xiaomi India) does not count the transaction value of imported goods from Xiaomi India and its contract manufacturers,” it said.

The statement added: “As the beneficial owner of such imported mobile phones and their parts, Xiaomi India did not add’royalty and license fees’ to the transaction value, thus evading tariffs.”

After completing the investigation, DRI issued three “show the reason” notices to Xiaomi, involving Rs 653 crore recovered between April 2017 and June 2020. These notices are court orders that require one or more parties to prove, explain, or justify something to the court.

Xiaomi did not respond to CNBC’s request for comment.

This is not the first time India has taken action against a Chinese technology company.

Last year, this South Asian country 118 apps banned It has links with China on the grounds of national security risks. It happened at the height of geopolitical tension between the two countries.